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German Court asks CJEU: Are businesses that provide password-free WIFI liable for third party copyright infringements?

04 December 2014
The German Regional Court of Munich (Decision No. 7 O 14719/12) has referred various questions to the CJEU seeking clarification on the liability of businesses that provide password-free WIFI access for copyright infringements carried out by their users.

In the case at hand a German shop owner that sold and let sound and light equipment for events provided a password-free WIFI access from his shop. The WIFI was named after the website of his shop in the hope that this would interest people in nearby cafes and shops to use the free WIFI to visit his website. At one point an unknown user shared a copyright protected song via that WIFI. The Court in Munich had to decide whether the owner of the WIFI was liable for the copyright infringement.

The German Federal Supreme Court already decided in 2010 that an individual that does not protect his WIFI adequately was liable for copyright infringements done via that WIFI access point.  The Court of Munich found that even if an individual was held liable a business owner should be held liable all the more. However the problem the Court saw was that the owner of the shop might be able to rely on the defences available under the E-Commerce Directive[1] which an individual would not.

Article 12 of the E-Commerce Directive states that a provider of an information society service (ISP) is not normally  liable for the information transmitted. Therefore, if the shop owner at the case at hand was deemed an ISP he might not be liable. This led the Court of Munich to ask the CJEU a variety of questions (9 in total) concerning the interpretation of Article 12 of the E-Commerce Directive.

The first part of the questions concerns whether the shop owner could be considered an ISP or not. One thing that lead the Court of Munich to doubt that the shop owner is an ISP was that he did not receive payment for providing the service. However Article 2 (a) of the E-Commerce Directive in combination with Article 1(2) of the Directive 98/34/EC[2] as amended by Directive 98/48/EC[3]  states that an ISP refers only to a service normally provided for remuneration. The Court further had doubts that the shop owner really "provided" a service in the meaning of Article 2 (b) of the E-Commerce Directive as he did not promote the service specifically but just left the WIFI open.

The second part of the questions deals with the scope of the limitation of liability set down in Article 12 of the E-Commerce Directive. The Court of Munich has asked whether this Article excludes all liability or whether it leaves room for liability for cease-and-desist orders after the ISP has been made aware of infringing acts conducted via his service. In the opinion of the Court of Munich it would be a huge disadvantage to copyright owners if WIFI owners could not be held liable at all. Copyright owners would be left with no option to take action against infringements if the owner of the WIFI does not track the users of his WIFI access point (which was the case here). The Court of Munich believes this might go against the values set forth in the InfoSoc Directive (2001/29/EC)[4] and Directive 2004/48/EC[5] on the enforcement of intellectual property rights.

The answers of the CJEU to the questions put forward by the Munich Court might have a big impact on the availability of free WIFI access. If the CJEU rules that providers of free WIFI access might be liable for copyright (and subsequently also other) infringements many businesses will have to review their practice of providing such services. However a clarification on the liability rules can only be welcomed in our opinion. It remains to be seen what the CJEU will decide.


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